Chapter 14: Marketing Channels and Retailing

Retailing!!

        Where can I buy a PlayStation 4? Can I buy it online? Can I go to the supermarket and get one? Can I call Sony and buy one?

I visited a Best Buy a few weeks ago and I was testing the PlayStation 4 and I really was sucked in and was ready to purchase one and go home and play. I asked a sales associate at the Best Buy if they had any consoles in stock he said no but he did add that all the accessories are available if I wanted to purchase that while waiting for my PlayStation to be delivered because the PlayStation 4 is on and order only demand. Going to Best Buy did help but being told I would have to wait only made me upset because my attitude as a consumer is that I want what I want at that moment in time, call me impatient but why should I wait for something when I want it now.

Last week I walked into a Gamestop while waiting for class to start and I asked if the PlayStation 4 was in stock and the associate told me that they were out of stock. This was making me frustrated because I wanted to purchase the console and play at home. What’s really interesting about both these retailers is that they offer the console and all its games and accessories at the same prices and they are both out of stock. The difference between these retail channels is that Gamestop only offers video games, tablets, and phones. They also allow the consumer to trade in their old products and the money go towards new product or they can receive cash. Best Buy has a huge variety of electronics has and offers an array of products from musical instruments to Blu-ray movies and televisions.

This is normal for Sony to offer their products at these retailers and it offers a direct channel to the consumer as well because you can also purchase any Sony product through its website, and they also have the Sony Wonder store in Manhattan that also offers the consumer direct access to their newest products. I didn’t get a chance to visit the Sony Wonder store, but I did go to Toys R’ Us in the Bronx and I asked for the console and was told that I would have to place a hold on it and pay a little now and the rest later. Like I mentioned in other posts the PlayStation 4 is doing amazing in sales crossing over the 5 million unit mark last month and is projected to be on only available to order and will be always available at retail stores in April.

I really liked the layout of Gamestop their window display showed upcoming games and they had boxes of PlayStation 4 consoles in the window display to lure the consumer inside. Once inside I was greeted and told if I needed anything to just ask. The customer service was great even though there were only two employees working. Behind the register was a huge display of accessories and prices for new and used consoles and also a display for recent and upcoming games that were available either to purchase or pre order. I have been to many Gamestops’ across the city and their layout is generally the same with the same displays and items to purchase, what I did notice now is that they offer new and used tablets so they are opening their market to meet the needs of the changing target market and offering products that suit the consumer needs now which is great.

Sony has a unique way of offering their products to its target market and they do a great job with creating displays and producing signs and offering new products on a monthly basis to keep luring the customer inside the retail stores. I being a consumer was lure in to it as well and I loved my experience at Gamestop, I tend to always do because I can get what I want and their store layout makes it easy to shop and their employees have a ton of product knowledge that helps with any question I have.

       

 

 

 

Chapter 6 Consumer Decision Making

Why Buy the PlayStation 4?

     With over 5 million units sold as of today you have to ask the question is all the hype worth the money for this new gaming system. My opinion yes, I experienced the system first hand in a Best Buy in Union Square and I was fairly impressed with the quality and actual fun I was having. In about a half hour I was ready to empty out my savings and walk home a

happy camper. But I have to be honest I have my doubts with the system and I do fall into the category of the consumer so there are things I would know before I make this $399 investment.

There are 5 stages to this decision making process and they are:

1.               Problem/Need Recognition- This is in general the first stage in which the consumer recognizes that what essentially is the problem or need and hence accordingly a consumer can identify the product or kind of product which would be required by the consumer.

2.               Information Search - In information search, the consumer searches about the product which would satisfy the need which has been recognized by the consumer in the stage previous to this one.

3.               Evaluation of Alternatives - In this stage, the consumer evaluates the different alternatives which the consumer comes across, when the consumer was searching for information. Generally in the information search the consumer comes across quite a few products and thus now the consumer has to evaluate and understand which product would be properly suited for the consumer.

4.               Purchase - After the consumer has evaluated all the options and would be having the intention to buy any product, there could be now only two things which might just change the decision of the consumer buying the product that is what the other peers of the consumer think of the product and any unforeseen circumstances.

5.             Post Purchase Behavior - After the purchase the consumer might just go through post purchase dissonance in which the consumer feels that buying the other product would be better. But a company should really take care of it, taking care of post purchase dissonance doesn't only spread good words for the product but also increases the chance of frequent repurchase.

My need for the console is similar to the target market because it’s a must have after all the marketing on television and reading all the amazing reviews I have to be honest I want one and I want one bad. Also compared to its predecessor the upgrade is well worth its price tag by not only being affordable but also accessible to the ever growing gaming world.

Sony impressively met the needs of the consumers this time around by allowing the gamers to share their experience at the touch of a button. That brings you closer to the ultimate gaming experience, go ahead and score 60 with LeBron and brag about it with your very own custom made highlight reel. It’s not just the sports games that’s getting all the shine you can share any moment in any game you play which is a new feature its predecessor did not have.

 Of course there is an alternative you can

spend an extra $100 and purchase an Xbox One. Even though the Xbox One is a step up from its predecessor it has its flaws that Microsoft is continuously trying to fix with constant software updates that are cleaning up the

bugs that players are experiencing. There are other alternatives like console only exclusives which are games that are only released for either the Xbox One or the PlayStation 4, Titanfall would be an Xbox One exclusive that Microsoft is marketing to grab some sales and influence some gamers to stay loyal to their console.

Infamous: Second Son being released this month is an example of a PlayStation 4 exclusive, it’s the third game in the series and this time you have an open world Seattle to lay with and a new protagonist to control and with marketing for the game being heavy at this moment right before release

Sony has Microsoft in a head lock and won’t let go until Xbox One gives up its lunch money.

 The purchase behavior is outstanding because the console sold over 5 million units, so consumers feel that PlayStation is the way to go and with impressive sales that are

expected to continue well into the rest of this year and beyond the consumer can only hear his friends and colleagues brag and then purchase one for themselves.

 Negative post purchase behavior is rare for this system because with excellent reviews, amazing record breaking sales, and continuous aggressive and different marketing strategies the PlayStation 4 is doing just fine and honestly I want one for myself. We live in a new day and age where gaming at home is normal, girls play video games and online gaming is at its peak and the community is going to keep growing with the times and as kids get older and new generations are introduced to the 21^st century one can only imagine how far Sony can push not only the PlayStation 4 but future consoles that are released.

Chapter 5: Developing a Global Vision

Sony to switch PS4 marketing from ‘low-key’ to ‘high-impact’ in 2014

Sony will switch from the low-key marketing tactics used to generate early buzz around the launch of its PlayStation 4 (PS4) console in the UK to a more traditional multimillion effort next year in a bid to reach a broader audience beyond gamers.

It marks the transition into what the technology maker says is “highly visible” advertising after focusing the bulk of its media outlay on targeted promotions to gamers since the brand was first revealed in February.

TV, digital, cinema and outdoor activity will roll out nationwide in the coming weeks promoting the PS4’s “For the Players” strap line. The push will be supported by a retail drive that unifies the PS4, PS3 and PS Vita brands under an umbrella theme to try and pep up sales for all three during the campaign.

Sony has initially targeted gamers in the hopes of shifting 5 million PS4 consoles by the end of March. This strategy will change in Q1 next year, according to the business, as the console’s marketing moves from focusing just on games to promoting its entertainment and connectivity features. It is an approach Microsoft’s Xbox One has employed around the launch of its Xbox One to try and exploit demand over the festive period.  

Murray Pannell, Play station’s marketing director in the UK, told Marketing Week its battle with Microsoft’s counterpart will revolve more around the brands and what they stand for than any previous generation.

He adds: “This will be the biggest campaign in the PS brand’s history. What we’re doing through our marketing aims not just to reach the gamer but also impact the broader audience. These are the people we need to convince that if they aren’t already a PS fan then they need to be. In the not too distant future we’re going to accelerate into the more casual family and kids market.” 

Written by: Sebastian Joseph

 Site sourced: http://www.marketingweek.co.uk/news/sony-to-switch-ps4-marketing-from-low-key-to-high-impact-in-2014/4008590.article

Sony goes global!!!

After releasing the PlayStation 4 in November and nearly doubling its sales compared to the Xbox One in one month in the US the console arrives in Japan. It’s a complete surprise that Sony delayed its release in Japan to dominate the western region of the world in time for the 2013 holiday season. Sony has sold more than 5.3 million units since its release and is still hard to find in stores in the US and in Europe. Sony calls this move the right move in their global vision to bring PlayStation to every corner of the globe. The Japan approach was fairly easy because in Japan the PlayStation 3 still holds dominance and is still in demand with upcoming games for the PlayStation 3 still yet to be released the PlayStation 4 was merely a present for gamers in Japan, South Korea, and Taiwan. In Japan the product is being offered in two bundles, a regular version that costs ¥41,900, and the other version that comes with the PlayStation camera peripheral for ¥46,100. With the Xbox One far from the Japan market and its popularity being slim to none compared to the PlayStation it’s no surprise that there is more than enough inventory for Japanese gamers to easily get their hands on the new console without having to wait on line.

With Sony having such strong sales in its first 90 days forecasters are predicting the console will not be available for at a free supply rate until April of this year. Its

 impressive how the demand for the console has been and how the market is responding to the PlayStation 4 not only in the US but globally as well. These predictions weren’t imagined by Sony upon release of the console but with such dominance over Xbox One at this point the sky is the limit and with critically acclaimed reviews and scarcity of the console in the US and other western regions in the world Sony is hard at work producing more consoles to be readily available for sale in its markets and stores.

Chapter 4 The Marketing Environment

Is the PlayStation right for you? That’s a million dollar question. As of February 8, 2014 the console has sold 5 million units. That’s not only impressive but actually record breaking. 


But what is the target market for the console with gamers everywhere now and days with technology beings the driving force of the world. Where does Sony stand in a world that’s always connected? In the gaming world they currently stand on top with the demographic of consumers being generally around age 30 and 40% of the gamers today being female it goes unquestioned that investors and innovators are looking at this map and telling themselves we need to create a console that appeals to this group and beyond. Beyond is an important word because that word was a part of Sony’s marketing strategy to show how their console would lead into a future where technology is king.

The pricing of the console was very important in 2013 the main concern come reveal time was the pricing. In a post-recession economic time how can a company like Sony appeal to new customers and satisfy current customers without breaking the bank of those consumer pockets and the answer to that was price. 


The Xbox One revealed a $499 retail price but included its new Kinect camera that is actually needed for the console to operate. Sony revealed the PlayStation 4 at a retail price of $399 and did not include a new camera but offered its camera as a separate add on retailed at $70. Sony went with a less expensive more appealing pricing which was strongly accepted by consumers and also was a big change for Sony which retailed its PlayStation 3 with a $499 and $599 price tag when the system was revealed. This approach followed a component lifestyle of consumers now instead of the money hungry approach that is not so appealing now and days.

Social media has played a major role in the way we received and send information with everyone having a mobile phone it is not hard to check your Facebook profile or send a tweet to your followers. With that being said PlayStation created a share button on their new controller that allows you to stay connected and share all your glorious moments with your closet friends. 


The Innovators at Sony had lots of ideas for their new controller and the ideas were great, upon reveal Sony showed off the Dual shock 4 controller which not only had a share button but also a finer grip better vibration and an indicator light that changed color based on how many players were playing at a  time. These are just a few features that showed how much they focused on what the consumer wanted and not on generating money for a fancy console. The only troublesome thing Sony announced was that there was no backward capability for the PlayStation 4 which meant that all your old games were not compatible. But they did have an answer for that , they called it PlayStation now which is a stream service like Netflix and Hulu plus which grants the gamer complete access to a library of PlayStation games from all their consoles from your mobile device, PlayStation and Sony televisions for a monthly fee. This announcement came at high praise and they are now Beta testing the service for their summer 2014 release for the PlayStation 3 and 4 consoles.

Chapter 3: Ethics and Social Responsibilty

Just like any company Sony has a code of ethics implemented in 2003, it supports all rights of its customers and employees. The code of ethics is broad across the board and supports not only its employee’s privacy but also its investors that support the company. Sony has protected the right of its employees and also and its research and development team protecting investments and ideas produce future profitable products.

 They also support the United Nations Global Impact practicing fair and safe customs throughout all the nations they implement the Sony brand in. Their code of ethics is just like most companies it is basically a guideline for employees to follow and understand that Sony understands and respects and values their employees in a manner that will help produce the best in their employees because they believe in equal and fair employment opportunity in any country they operate in. Sony protects all private and confidential information of their employees and respects the values of its employees which is a really good thing because for such a big company that is in a broad range of countries it’s responsible of Sony to respect the values of its employees investors stockholders and anyone who is a part of the Sony family. Their code of ethics has not changed in 11 years and Sony has been successful and free of employee scrutiny and rebellion in all its years of business. To this date I believe that Sony practices equal and fair conduct to its employee’s and has not faced any charges or backlash from within its company and that’s impressive for a company that started more than 5 decades ago.

Chapter 2: strategic marketing for competitive advantage

Sony’s marketing plan was fairly bold. They used a new slogan about 5 months prior to release the new PlayStation 4 system. The commercial was released during the NBA finals on Tuesday June 11, 2013 and it features a greasy-haired man walking through a path of destruction speaking of gamer greatness featuring previews of many upcoming games that will be released with the system in November of 2013 in time for the holiday season. The commercial lasted about 90 seconds and ended with the PlayStation 4 slogan “Greatness Awaits” as a tease to the anticipation of the upcoming console.

 

Microsoft was fairly different with their approach to attract customers they used a more family orientated method by placing a family in a living room in front of a television screen basically showing off the new features of the Xbox One which include a new connect camera that tracks complete body movement, facial and vocal recognition of up to 4 players, and a more interactive home screen allowing the player to have complete access and custom ability of  the console.




Recent news:
Microsoft’s strategic plan recently hit a huge bump when they were accused of paying people to post positive blogs about the new system. Gamers are outraged and Xbox is receiving major scrutiny for their stealthy actions in an attempt to boost sales and drive in new customers.

Sony has remained consistent with their strategy using the same aggressive approach and has also stated that half of their users are subscribed to PlayStation Plus, a service that provides gamers with bonus content and is a paid subscription that is needed to play games online on the PlayStation 4.

 

 

 

Sales war:

Since the PlayStation 4 was released a week prior to the Xbox One it seemed like Sony had a clear advantage over Microsoft, which it does. As of December 28, 2013 Sony has been able to sell 4.2 million units compared to Microsoft’s 3 million units as of the same date. But numbers are still up in the air for quarter 1 of the 2014 fiscal year as Sony has stated that would have sold close to 5 million units by the end of march and Microsoft claims that their numbers are good and the Xbox One is still in demand and that they have shipped out 3.9 million units since its release.

 

 

Next Round:

With two different approaches and two different marketing strategies it seems clear that to date the Sony PlayStation 4 is beating the Xbox One. Not only has it sold more its actually appealing more to gamers and the needs of the gamer instead of the Xbox One which is basically calling itself an all in one system that allows you to multitask as you play. Even though the Xbox One sales are strong in the long run Sony’s advantage is clear and present and if Microsoft doesn’t release Xbox One only titles and continues its impressive Xbox Live service its clearly going to lose this race come holiday season 2014 which is expected to see both consoles release more titles for their consoles. But the next round in this fight comes right at the end of quarter 2 when the E3 convention is held in Los Angeles previewing upcoming games and announcements from Sony and Microsoft.

 

 

 

 

Chapter 1 mission statement/ history of Sony PlayStation

Sony is a global manufacturer of audio, video, communications and information technology products for consumer and professional markets

Vision: To create exciting new digital entertainment experiences for consumers by bringing together cutting-edge products with latest generation content and services.

Mission: Sony is committed to developing a wide range of innovative products and multimedia services that challenge the way consumers access and enjoy digital entertainment. By ensuring synergy between businesses within the organization, Sony is constantly striving to create exciting new worlds of entertainment that can be experienced on a variety of different products. History of Sony:  Masaru Ibuka, the co-founder of Sony   Sony found its beginning in the wake of World War II. In 1946, Masaru Ibuka started an electronics shop in a department store building in Tokyo. The company had $530 in capital and a total of eight employees. The next year, he was joined by his colleague, Akio Morita, and they founded a company called Tokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Corporation). The company built Japan's first tape recorder, called the Type-G. In 1958 the company name was changed to Sony.   In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs' invention of the transistor. He convinced Bell to license the transistor technology to his Japanese company, for use in communications. Ibuka's company made the first commercially successful transistor radios. According to Schiffer, Sony's TR-63 radio "cracked open the U.S. market and launched the new industry of consumer microelectronics." By the mid-1950s, American teens had begun buying portable transistor radios in huge numbers, helping to propel the fledgling industry from an estimated 100,000 units in 1955 to 5 million units by the end of 1968.  Sony Group Headquarters at Sony City in Minato, Tokyo. Sony co-founder Akio Morita founded Sony Corporation of America in 1960. The process, he was struck by the mobility of employees between American companies, which was unheard of in Japan at that time. When he returned to Japan, he encouraged experienced, middle-aged employees of other companies to reevaluate their careers and consider joining Sony. The company filled many positions in this manner, and inspired other Japanese companies to do the same. Moreover, Sony played a major role in the development of Japan as a powerful exporter during the 1960s, 70s, and 80s. It also helped to significantly improve American perceptions of "made in Japan" products. Known for its production quality, Sony was able to charge above-market prices for its consumer electronics and resisted lowering prices.   In 1971, Masaru Ibuka handed the position of president over to his co-founder Akio Morita. Sony began a life insurance company in 1979, one of its many peripheral businesses. Amid a global recession in the early 1980s, electronics sales dropped and the company was forced to cut prices. Sony's profits fell sharply. "It's over for Sony," one analyst concluded. "The company's best days are behind it." Around that time, Norio Ohga took up the role of president. He encouraged the development of the Compact Disc in the 1970s and 80’s, and of the PlayStation in the early 1990s. Ohga went on to purchase CBS Records in 1988 and Columbia Pictures in 1989, greatly expanding Sony's media presence. Ohga would succeed Morita as chief executive officer in 1989.   Under the vision of co-founder Akio Morita and his successors, the company had aggressively expanded into new businesses. Part of its motivation for doing so was the pursuit of "convergence," linking film, music, and digital electronics via the Internet. This expansion proved unrewarding and unprofitable, threatening Sony's ability to charge a premium on its products as well as its brand name. In 2005, Howard Stringer replaced Nobuyuki Idei as chief executive officer, marking the first time that a foreigner has run a major Japanese electronics firm. Stringer helped to reinvigorate the company's struggling media businesses, encouraging blockbusters such as Spider-Man while cutting 9,000 jobs.[ He hoped to sell off peripheral business and focus the company again on electronics. Furthermore, he aimed to increase cooperation between business units, which he described as "silos" operating in isolation from one another. In a bid to provide a unified brand for its global operations, Sony introduced a slogan known as "make. Believe" in 2009.   Despite some successes, the company faced continued struggles in the mid- to late-2000s.[ It became known for its stagnancy, with a fading brand name. In 2012, Kazuo Hirai was promoted to president and CEO, replacing Sir Howard Stringer. Shortly thereafter, Hirai outlined his company-wide initiative, named "One Sony" to revive Sony from years of financial losses and bureaucratic management structure, which proved difficult for former CEO Stringer to accomplish, partly due to differences in business culture and native languages between Stringer and some of Sony's Japanese divisions and subsidiaries. Hirai outlined 3 major areas of focus for Sony's electronics business, which include imaging technology, gaming and mobile technology, as well as a focus on reducing the major losses from the television business.   (Source: http://en.wikipedia.org/wiki/Sony)     History of Sony PlayStation:

PlayStation was the brainchild of Ken Kutaragi, a Sony executive who had just come out of his hardware engineering division at that time and would later be dubbed as "The Father of the PlayStation".

 

The console's origins date back to 1988 where it was originally a joint project between Nintendo and Sony to create a CD-ROM for the Super Famicom. Although Nintendo denied the existence of the Sony deal as late as March 1991, Sony revealed a Super Famicom with a built-in CD-ROM drive (that incorporated Green Book technology or CDi) at the Consumer Electronics Show in June 1991. However, a day after the announcement at CES Nintendo announced that it would be breaking its partnership with Sony, opting to go with Philips instead but using the same technology. The deal was broken by Nintendo after they were unable to come to an agreement on how revenue would be split between the two companies. The breaking of the partnership infuriated Sony President Norio Ohga, who responded by appointing Kutaragi with the responsibility of developing of the PlayStation project to rival Nintendo.

 

At that time, negotiations were still on-going between Nintendo and Sony, with Nintendo offering Sony a "non-gaming role" regarding their new partnership with Philips. This proposal was swiftly rejected by Kutaragi who was facing increasing criticism over his work with regard to entering the video game industry from within Sony. Negotiations officially ended in May 1992 and in order to decide the fate of the PlayStation project, a meeting was held in June 1992, consisting of Sony President Ohga, PlayStation Head Kutaragi and several senior members of Sony's board. At the meeting, Kutaragi unveiled a proprietary CD-ROM-based system he had been working on which involved playing video games with 3D graphics to the board. Eventually, Sony President Ohga decided to retain the project after being reminded by Kutaragi of the humiliation he suffered from Nintendo. Nevertheless, due to strong opposition from a majority present at the meeting as well as widespread internal opposition to the project by the older generation of Sony executives, Kutaragi and his team had to be shifted from Sony's headquarters to Sony Music, a completely separate financial entity owned by Sony, so as to retain the project and maintain relationships with Philips for the MMCD development project (which helped lead to the creation of the DVD). (source: http://en.wikipedia.org/wiki/PlayStation)

 

Formation of Sony Computer Entertainment

At Sony Music, Kutaragi worked closely with Shigeo Maruyama, the CEO of Sony Music, and with Akira Sato to form Sony Computer Entertainment, Inc. (SCEI) on November 16, 1993. A building block of SCEI was its initial partnership with Sony Music which helped SCEI attract creative talent to the company as well as assist SCEI in manufacturing, marketing and producing discs, something that Sony Music had been doing with Music Discs. The final two key members of SCEI were Terry Tokunaka, the President of SCEI from Sony's headquarters, and Olaf Olafsson. Olafsson was CEO and president of New York based Sony Interactive Entertainment which was the mother company for the 1994-founded Sony Computer Entertainment of America (SCEA).

 

The PlayStation project, SCEI's first official project, was finally given the green light by Sony executives in 1993 after a few years of development. Also in 1993, Phil Harrison, who would later become President of Sony Computer Entertainment Worldwide Studios, was recruited into SCEI to attract developers and publishers to produce games for their new PlayStation platform.

 

After a demonstration of Sony's distribution plan as well as tech demos of its new console to game publishers and developers in a hotel in Tokyo in 1994, numerous developers began to approach PlayStation. Two of whom later became major partners were Electronic Arts in the West and Namco in Japan. One of the factors which attracted developers to the platform was the use of a 3D-capable, CD-ROM-based console which was much cheaper and easier to manufacture for in comparison to rival consoles from Sega and Nintendo which used cartridge systems. The project eventually hit Japanese stores in October 1994 and gained massive sales due to its lower price point than its competitor, the Sega Saturn. Popularity of the console spread after its release worldwide in North America and Europe.(source: http://en.wikipedia.org/wiki/PlayStation)

 

PlayStation 4:

The PlayStation 4 (PS4) is the latest video game console from Sony Computer Entertainment announced at a press conference on February 20, 2013. In the meeting, Sony revealed some hardware specifications of the new console. The eighth-generation system will introduce the x86 architecture to the PlayStation series and was launched in the fourth quarter of 2013. According to lead system architect, Mark Cerny, development on the PlayStation 4 began as early as 2008. PlayStation Europe CEO Jim Ryan emphasized in 2011 that Sony wanted to avoid launching the next-generation console behind the competition.

Among the new applications and services, Sony will introduce the PlayStation App, allowing PS4 owners to turn smartphones and tablets into a second screen to enhance gameplay. The company also plans to debut Gaikai, a cloud-based gaming service that hosts downloadable content and games. By incorporating a share button on the new controller and making it possible to view in-game content being streamed live from friends, Sony plans to place more focus on social gameplay as well. The PlayStation 4 was released in November 2013. (Source: http://en.wikipedia.org/wiki/PlayStation)